Egypt’s Suez Cement Group said on Thursday its nine-month net profit fell 8.5 percent to LE 906.7 million ($157 million), with sales down despite rising grey cement consumption.
Suez, Egypt’s largest listed cement company and a subsidiary of Italcementi, said consolidated net sales in the period fell 2.1 percent to LE 4.69 billion, while operating income slipped 10 percent to LE 1.256 billion.
Egypt’s grey cement consumption grew 2.8 percent in the first nine months of 2010, the company said, without giving a reason for the decline in its earnings.
An analyst said she expected the cement sector to pick up in the fourth quarter after a bad third quarter, especially since the government said last month it was not renewing a cement export ban that had been in place since 2009.
"I think that Suez simply followed the cement sector’s third-quarter results, which fell due to a decline in construction … during Ramadan and the summer months," said Radwa Abou El Naga, an analyst at Prime Research.
The drop was greater than the 1.9 percent fall in first-half net profit that it reported in August.
Government stimulus spending on infrastructure and growing demand for housing helped fuel demand for cement last year, but analysts have said they expect new policies such as a 5 percent sales tax and a rise in electricity costs to cool demand.
Suez Cement shares have fallen 10 percent this year compared with a 7.8 percent gain by Egypt’s benchmark index. The stock closed at LE 39.82 on the Egyptian Exchange on Wednesday.
